Unions call for levy on Sky, Virgin Media

A report commissioned by BECTU and the National Union of Journalists has suggested raising cash for public service broadcasting by imposing levies on Sky and Virgin Media.

The Institute for Public Policy Research suggested that the UK could adopt retransmission levies on service providers "which broadcast material created by the BBC, Channel 4 or ITV but do not pay for the content". It said that similar levies are used in 30 European countries and raised €99m in 2007. Were a £5 flat-rate levy per Sky and Virgin subscriber applied, the IPPR said, £63m would be raised to plug the public service broadcasting funding gap.

"All the plans we’ve seen so far suggest ways of spreading diminishing resources more thinly. Now the government has detailed evidence that shows new funding could be found – all it needs is the political will to get behind public service broadcasting," said NUJ general secretary Jeremy Dear. "We suspect that companies will vehemently resist these proposals but sometimes what’s good for the public has to come first."

The IPPR also suggested that a 1% levy could be applied to revenues earned by Sky and Virgin in a more that would raise £70m based on 2007 figures, and that new media companies such as internet service providers and mobile phone operators could charge a per-subscriber fee for access to the web.

"Levies continue to present a possible solution to bridging the funding gap in order to maintain current levels of public service broadcasting," the report concluded. "There are inherent political difficulties: an additional tax is unlikely to be received enthusiastically by those industries to which it applies".

The suggestion of applying levies to support public service broadcasting was effectively dismissed by Ofcom chief executive Ed Richards in a speech today at a local media summit organised by the Department for Culture, Media and Sport.

"Clearly, the case for direct taxation to be used for such a purpose is, for the foreseeable future, a very, very difficult case to make," he said. "Nor is an industry levy likely to be an attractive proposition in the middle of a recession, even though it has been adopted in a number of other countries."